Air Products to Invest $2 Billion for Landmark Coal-to-Methanol Project in Indonesia

Air Products to Build, Own and Operate Facilities and Supply Methanol Under Long-Term Contract, Enabling Conversion of Natural Resources into Higher-Value Products

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Air Products

May 14, 2020, 16:15 ET

LEHIGH VALLEY, Pa., May 14, 2020 /PRNewswire/ -- Air Products (NYSE: APD) today announced it has signed a definitive agreement for a long-term on-site contract for a world-scale coal-to-methanol production facility in Bengalon, East Kalimantan, Indonesia.

Under the long-term on-site contract, PT. Bakrie Capital Indonesia, part of the Bakrie Group, and PT. Ithaca Resources, part of the PT. AP Investment, will supply the coal feedstock and have committed to offtake the methanol production for sale within Indonesia. Air Products will invest about US$2 billion to build, own and operate the air separation, gasification, syngas clean-up, utilities and methanol production assets to produce methanol for Bakrie and Ithaca. This facility—including Air Products' proprietary Syngas Solutions^TM dry-feed gasifier—will enable nearly two million tons per year (TPY) of methanol to be produced from nearly six million TPY of coal. The project is expected onstream in 2024.

Seifi Ghasemi, Air Products' chairman, president and chief executive officer, said, "As Southeast Asia's largest economy, Indonesia is committed to reduce its energy imports and efficiently convert abundant coal resources into high-value products. We are proud to have been awarded another world-scale gasification project, where we will deploy our capital, technology and operational expertise to help Indonesia meet these important goals. This is another example of our long-term strategy to deploy capital into high-return strategic industrial gas projects."

Dr. Samir Serhan, Air Products' executive vice president, added, "Our core competency is our ability to develop, execute, own and operate complex process facilities that help our customers create engines of economic growth and social development. We look forward to supporting Bakrie and Ithaca in this game-changing megaproject that will provide methanol for domestic consumption to support Indonesia's sustainable economic growth."

Adika Nuraga Bakrie, PT. Bakrie Capital Indonesia's chief executive officer, together with Agoes Projosasmito, PT. Ithaca Resources' president director, said, "We're very proud to collaborate in this strategic project with Air Products, the world leader in coal gasification. In line with President Joko Widodo and the Government of Indonesia's plan, there is strong momentum for this project, which will produce high value methanol from abundant, low-value coal reserves. Furthermore, we are very encouraged by the Government's support for developing cutting edge technology and products in the Eastern Region, which will contribute to the overall sustainable economic development of Indonesia."

Air Products continues its leadership in gasification projects around the world. In addition to the new project in Indonesia, Air Products is executing a number of gasification projects in China as well as the Jazan project in Saudi Arabia.

About Air Products
Air Products (NYSE:APD) is a world-leading industrial gases company in operation for nearly 80 years. Focused on serving energy, environment and emerging markets, the Company provides essential industrial gases, related equipment and applications expertise to customers in dozens of industries, including refining, chemical, metals, electronics, manufacturing, and food and beverage. Air Products is also the global leader in the supply of liquefied natural gas process technology and equipment. The Company develops, engineers, builds, owns and operates some of the world's largest industrial gas projects, including gasification projects that sustainably convert abundant natural resources into syngas for the production of high-value power, fuels and chemicals.

The Company had fiscal 2019 sales of $8.9 billion from operations in 50 countries and has a current market capitalization of about $50 billion. More than 17,000 passionate, talented and committed employees from diverse backgrounds are driven by Air Products' higher purpose to create innovative solutions that benefit the environment, enhance sustainability and address the challenges facing customers, communities, and the world. For more information, visit airproducts.com or follow us on LinkedIn, Twitter, Facebook or Instagram.

About Bakrie Group and AP Investment
Bakrie Group is one of the leading corporations in Indonesia. Its investment portfolio approach is in mastering potential businesses, developing long-term business synergies, and designing and implementing value creation strategies. Its business activities have expanded to include general trading, manufacturing, construction services, agribusiness, mining (coal and mineral), oil & gas, and media telecommunications. The Group also participates in strategic infrastructure development efforts in the energy and transportation sectors. This business diversification has opened up opportunities for the Company to contribute to national development.

Bakrie Group through PT. Bumi Resources Tbk (IDX:BUMI) operates two coal mining facilities, PT. Kaltim Prima Coal (KPC) and PT. Arutmin Indonesia (Arutmin), and PT. AP Investment through PT. Ithaca Resources also has several coal mining licenses, including PT. Kaltim Nusantara Coal ("KNC"). The coal gasification that will be built in this cooperation is designed to convert coal to syngas for methanol production from coal supplied from KPC and KNC.

NOTE: This release may contain forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's reasonable expectations and assumptions as of the date of this release regarding important risk factors. Actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors not anticipated by management, including risk factors described in the company's Form 10K for its fiscal year ended September 30, 2019.

SOURCE Air Products